Summary

Much of the optimism surrounding cellulosic ethanol has faded because of the ongoing economic slump, a plentiful supply of ethanol made from corn, and uncertainty among policymakers. Numerous companies have either shelved plans to build commercial-scale cellulosic ethanol plants or walked away altogether. Even the promise of millions of dollars from the U.S. Department of Energy hasn't enticed them back. The upshot: The U.S. government's flagship plan to reduce the nation's dependence on oil by scaling up cellulosic ethanol is in deep trouble, highlighting the complex technical, economic, and political forces buffeting global efforts to create viable alternatives to fossil fuels. And observers say decisions that Congress and federal agencies make this year could shape the nascent U.S. biofuels industry for decades to come.